Power Lunch - Dow rallies 400 points on strong jobs report, S&P 500 touches 6,000 6/6/25

Episode Date: June 6, 2025

Stocks jumped Friday after the latest nonfarm payrolls data came in better than expected, easing concern the economy faces an imminent slowdown. We’ll cover all of the angles for you.Plus filmmaker and author Justine Bateman joins us to discuss how AI will reshape Hollywood, for better or worse.    Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks and your money hire to end the week. Welcome to Power Lunch, everybody, alongside Kelly. I am Brian a busy Friday. You got positive developments in the U.S.-China trade war that have stocks in your money higher right now. Even Tesla is back up. And Mark Fields, by the way, is here to talk about it. Plus, will AI save Hollywood or destroy it?

Author and filmmaker Justine Bateman is all over it. She joins us to discuss and the jobs report. Maybe helping bring buyers in as well today. A little bit better than some estimates. And now the S&P 500 back above 6,000 for the first time. since February, Kelly, we've come full circle from the tariff and trade-fueled falloff and the market scare of early April. And now we are back in the green. And I remember who was talking about not to panic back then, folks. Don't worry about the retirement account. Just stay

the course. That ill-gotten tweet I deleted because I was getting murdered for saying that you don't lose money until stocks sell off. And they were leading national news programs with retirees being wiped out. Folks, if losing 15 percent, you're not, you're going to be able to, you. If losing 15 percent, of your money in a couple of weeks while scary is going to wipe you out, then the stock market is not for you. But not just that. Let's just be glad and grateful that we have come back. The way we have is very unprecedented and unusual for us to be almost back to all-time

highs with this short of time period from the past one. I think I quote the movie Bill and Ted's Excellent Adventure when I say it's computers. We just mentioned Tesla as the big money story. You can Google that if you're confused. As Trump and Elon Musk traded Barb's online and on TV in the heated exchange, still shaking up DC right now. Amon Javvers, who probably did not go to San Dimas and the high school football doesn't rule, joins us now for the White House with a lot more. Amen, hopefully you also got that reference. Excellent, excellent movie reference there. I definitely did get that. Yes, San Dimas High

School football rules, but the more important story is just the fallout from what we saw yesterday in this sort of blockbuster exchange of barbs between Elon Musk and President Trump, a relationship that a lot of people had predicted was going to go sour. and just turned bitter very, very quickly yesterday. But today it's been, you know, all quiet on the North Lawn here. We have not seen the tit for tat that we expected to see, perhaps, today. As both sides seem to look for a de-escalation, I was told the plan here at the White House today from the president.

It's just to get back to work. He doesn't see any need for a phone call with Elon Musk today. He's focusing on some executive orders, which we think will see this afternoon, and he's leaving for Bedminster, New Jersey, this afternoon. So the president is, though, considering we are told, selling or giving away. Remember that red Tesla that he got when he was out on the south lawn with Elon Musk doing sort of a commercial for Tesla and for Elon Musk? He bought a red Tesla at that event directly from Elon Musk, and now we're told he is considering selling it. Earlier in the day, I said, you know, we were above showing a live picture of that red Tesla.

but I was joking. We're not above that. Here is a live picture of that red Tesla. It is still parked, as you can see. That's West Executive Drive. That's right off of the White House grounds between the White House and the Eisenhower Executive Office building. That is the Red Tesla that President Trump purchased. It is still there.

We'll update you if it moves, guys. And maybe that's a metaphor for the relationship. Still sitting in place for now, but we'll see what happens. I think we need to leave a camera on that Tesla and put it in, what do they call it, a bug in the corner of the screen a man? Yep. Yeah. We have the Tesla. You can take a look at. That's live. We can put a little live bug up in the upper left.

Well, has it has it? There it is. Has it moved? Amin has it ever moved? It has moved. Yes. It was a couple weeks ago I saw it. It was down about five parking spaces to the left. I know Caroline Levitt, the White House Press Secretary, took it for a spin the other day. She posted on social media about that. I think some of the younger aides here enjoy taking it out on the town. Hopefully somebody charges it because of somebody who has owned an EV, there's a There's something called a vampire drain where basically even if you're not using an EV, the battery will go down just over time. And so at some point that car will be undrivable unless it is plugged into something.

There is a charging station on campus here, Brian. So they can charge the staff can run around to the charger and charge it up every couple of days if they need to. The other question is whether Elon bricks it, right? I mean, I guess Elon could shut it down remotely. So we'll see, you know, depending on how bad the relationship gets. Well, based on how much, you're in D.C., right? So you're waking up, amen, you know, I know you get up at 4.30, probably go for a run. You get up, you wake up, you look at the Washington Post.

This story is not a business story. This is capturing the attention of the nation, the New York Times, Washington Post. This story, I think it's fair to say, transcends money. I know Musk is a money guy, a business guy. This is an earth-shattering, shattering, I guess, in D.C. Yeah, look, I mean, you're absolutely. I'm absolutely right, Brian. I mean, I just did a tally this morning when I got up and looked at them. The New York Times had, I think, 10 items about this on their app this morning.

The Washington Post had six. The Wall Street Journal was more reasonable with their coverage. They had three. But this is dominating all the global papers. This is dominating. Think about all the different communities this affects. I mean, not only Republican politics here in Washington, but also business, also Silicon Valley, also cryptocurrency. you know, in all those different sectors, there are, you know, Elon stands and Trump stands, and all of them who are now having to pick aside, right, and decide, you know, who are they going to follow? Elon Musk suggesting yesterday that he's got a 40-year time horizon and President Trump only has a three-and-half-year time horizon. That sends a message to Republican senators on Capitol Hill.

You know, his nearly infinite pocketbook is going to be around for a long time in Republican politics. So who are you going to follow? Although. We joke around about this, and there are some, you know, you know, surreal elements to this, let's say. But this is serious stuff. It's the most powerful man in the world in a knockdown, dragout fight with the richest man in the world. Quickly to that point, though, Amin, the journal did point out that to some extent,

Musk's aura in the White House began to fade when he couldn't deliver on that Wisconsin, was it Wisconsin or Michigan, the Supreme Court election, remember where he poured millions and millions in, and he lost, his side lost. And so I know Musk is saying, and it's tempting to think, that his money, can do more than the president can accomplish. But it was that specific case that made Trump reconsider, according to this report, just how much influence he will ultimately have with the public. I think that's fair.

And there was also the moment where there was the famous blow-up between Musk and Scott Besson, the Treasury Secretary, uh, over Doge and whether Doge was being effective or not, and whether Doge was overreaching, uh, firing people who were in other cabinet members' purviews, whether it was achieving the goals that Musk set out. Remember, he said he was going to cut trillions from federal spending. Didn't come anywhere close to that at the end of the day once he got a look under the hood at where all the spending was going. So, you know, there was, the bloom was coming off the rose here at the White House for Elon.

And I think there was some reporting, you know, that the president was getting a little bit annoyed with Musk, you know, showing up at Mara Lago all the time. He was spending the night here at the White House a lot. And the president said himself yesterday that Elon was wearing thin. So I think patience was sort of wearing out in that relationship already, and then we hit the breaking point with this, you know, the so-called big, beautiful bill. I knew Aiman would know the newspaper references. None of this was rehearsed or planned, by the way, and Aiman knows that. He was literally like New York Times, watched the post.

Amen, you're the best. Thank you very much. Appreciate that. Excellent reference. All right. Thank you very much. Now let's turn from Rifts to Robo Taxis and get a look at what is next maybe for Elon Musk as he returned to the Tesla helm. the bow covering that side of the Tesla story, Phil, and there are no shortages of storylines here. Yeah, and what we want to focus on are the two areas where Elon Musk said, and he told David

Faber this. He said, our future is optimist and autonomous. We're not going to talk about optimist. We're going to talk about autonomous because that's something tangible that theoretically is going to be driving Tesla's results starting next week and over the next couple of years. So here are the autonomous vehicle plans that Tesla has laid out. We get the Robotaxy rollout next week in Austin, Texas. Remember, very small numbers of vehicles, and there will be remote drivers watching those vehicles, by the way. Cybercat production is slated to start next year. The goal here, level four autonomous driving. We cannot say this enough. The full self-driving technology in Tesla is not completely self-driving. It's level two. It's not even level three. It hasn't been

certified at that. So what you're looking at is the driver has to stay engaged. All of this brings up the question with the cyber cab, well, if they get to cyber cab and there's no steering wheel and there's no driver in there, well, they'll have completely unsupervised full self-driving technology for their ride hailing service. They would. Now, the question is, how do you get there and who may potentially stand in the way? This gets back to the feud with President Trump. There's no indication that the National Highway Traffic Safety Administration is going to start being more scrutinizing of Tesla, if you will. But they could. If the president gets really mad, it wouldn't take much for him to say, hey, Nitsa, why don't you check out what's going on at Tesla? Tesla has

the ability to investigate automakers. They do this all the time. They also have the ability to compel automakers to make changes in vehicles, to compel automakers to do recalls they may not want do, and they've done that with Tesla in the past. Could that happen in the future? Again, no indication that the president or the DOT under Sean Duffy have said, yeah, let's get a little hard on Tesla here. Keep in mind the commercial service of Robotaxy, the goal, as you take a look at shares of Tesla, the goal is to start that commercial service, that ride hailing service. Another word, paid rides. It's invitation only when they start next week, but paid rides to the broader public in the fall. At least that's the goal at this point, guys.

Phil Lebo, Phil, great stuff. As always, thank you very much. All right, your next guest folks can offer up unique insights into everything autos from the feud between Trump and Milan Musk to the end of EV tax credits, even about the China rare earth story that we talked about yesterday. Mark Fields, the former CEO Ford, also a CNBC contributor. Mark, gosh, there's so many places to go with this, I guess, and I'm going to ask you to kind of speculate and editorialize here, which is if people want an EV, but now they don't want to buy a Tesla because they just, they just don't want to deal with the Elon Musk stuff.

I've talked to many dealers have suggested that, yeah, they're picking up some business, right? So somebody's not buying a Tesla or selling their Tesla and buying a Ford Machi. Some people are going back to gas or hybrid cars, which is not the way things should, I guess, be going. What do you think is going to happen with Tesla buyers and Tesla sellers? Well, Brian, it's a great question. I guess it's never a great strategy when you alienate a big portion of your buyers, as Musk did when he went into the government and headed up Doge. And now kind of coming out, he's alienating, let's say, the other side of the political spectrum, which makes up his customers. I mean, you know, when I was running forward, we wanted to sell to Republicans, Democrats, independents. And, you know, I guess as a CEO going out there and you mix, your personal opinions and having that impact, you know, your stock price and things of that nature,

that's that's that if you're a shareholder or Tesla, I guess you have to buy into that when you buy a share of Tesla. But if you're not looking to buy a Tesla, as you said, you know, there's a lot of EV models that have been introduced out there. The issue though, Brian, is, you know, with this big beautiful bill, if in fact the $7,500 E.V. tax credit goes away. it's just going to raise the price for all these vehicles. And that's one of the inhibitors right now for selling more EVs. And the other thing, and again, this is a world of irony here. If the automakers, the established automakers, end up selling more ice engines than their EVs,

that's going to impact their fuel economy numbers. And therefore, that's going to leave them open to fines. And guess what? they're going to have to go to folks like Tesla to buy tax credits to actually offset that. True. So, you know, it's an interesting situation, but, you know, you've seen Tesla sales really, you know, plummet in Europe and some other places, and it's challenged here in the U.S. And this thing is just a net negative.

But you bring up a point, Mark, a lot of people just view this as a savvy way for Elon Musk to reposition himself with the portion of the public he alienated, but he's doing so in such an extreme way he might alienate the other portion that he had just won over. Yeah, you're exactly right. People, you know, in this case, they have, I won't say long memories, but, you know, they have medium term memories. And it's just, you know, just overall, it's a net negative when you're alienating different portions of your potential customer base. As I said, they're, you know, Tesla is actually uniquely positioned if these incentives go off because, you know, they vertically integrated. But, you know, they're, you know, they're, you know, The automakers, again, they're in a tough position as well because the price of their ebs are going to go up. They're not going to meet their fuel economy requirements. And therefore, they're going to have to buy credits from folks like Tesla, which is just a creditor for them. How do automakers view Tesla? It's kind of its own thing.

You know, California, Texas, non-union, electric. What's the, you know, I'm sure there were people that thought Tesla was going to fail 15 years ago. Don't worry about that guy out west. He doesn't know what he's doing. He can't do it. we do. He obviously has become wildly rich and successful doing it. So Mark, how does Detroit view Tesla? Well, listen, they're they they push the industry towards EVs. They, you know, they came with without a lot of preconditions. They've innovated a lot in this area. As they said,

they've moved the market. So I think, you know, from an auto industry standpoint, there's a lot of respect in terms of now versus initially, as you said, it was, you know, a lot of it was dismissed. it's almost science project like. So there's a lot of respect on the innovation side, but also there's a lot of resentment, if you will, and that they get to play by different rules. For example, you know, the automakers in the 50 states, they have to sell through dealers.

You know, Tesla, you know, sells through their own stores. As a CEO, Elon, as a CEO, it says a lot of things that if you're, you know, an established CEO of one of the established automakers, you know, you probably got the SEC breathing down your neck, and in some cases you might be wearing an orange jumpsuit with a number on your back. So, you know, he gets a lot of kitchen passes.

So I'd say it's a combination of both. You know, listen, I've been, I don't want to say critical of EVs, but you and I have had many, many conversations. I've owned them. I know what they can do. I know what they're not. And the only thing I've tried to bring to people, and this goes to a story mark that we talked about yesterday, I know you're hot on this

sort of rare earth, the minerals, the stuff that goes into the batteries and the magnets to make, not just EVs, but iPhones and wind turbines and everything like this. A lot of that stuff comes from really bad places, right? So does oil, by the way, difficult, dangerous, environmentally fragile areas, but also some places that don't have great human rights records, okay, in a lot of different places. A lot of lithium that's mined in Australia is sort of washed in Myanmar and acid and then shipped to China and then that's shipped on a giant carbon spewing boat over to the West.

I'm just trying to highlight the fact that it's for the industry, and tell me if I'm wrong, Mark. It's not so easy just to say, well, there's no emissions coming out of the tailpipe, thus this EV is clean. This map we're showing and the way batteries travel around the world and the stuff you've got to mine to make them, that's not that clean either, is it? I mean, this is a hard, dangerous world that we're talking about, and it's a world that China controls. Yeah, I mean, you know, overall, when you look at EVs, you know, if you look at it from what we call, well to wheel, right? When you look at, you know, how the batteries that you said are produced, the amount of, you know, kind of environmental issues around that, it is dangerous. But I would

point out, Brian, that, you know, this rare earth metal issue, this is not just EVs. Yes, there's more rare earths in EVs than there is ice engines. But in ice vehicles, you've got rare earth metals in a whole host of motors, right? Whether, you know, it's for, you know, wipers, windshield wipers, headlights, solenoids for, you know, the power steering or the engines, you know, safety systems, all those kind of things. And the bottom line, as you said, you know, China, they're responsible for about 65% of the mining, but they're responsible for about 90% of the refining of this. And they have a lot of know-how there. So is Detroit, is Detroit beholden to Beijing?

Well, right now, when you look at the fact that they own 90% of the refining, you could say they are, right? You know, I'll put it very simply, if you thought the chip shortage was bad, wait till magnets go missing. And listen, I think the automakers are going to, you know, they're going to try workarounds, right? They're going to try and look at sources in Europe and Asia. And there are sources there, but nowhere near the amount to satisfy demand. They'll do things, you know, if this shortage continues, they'll do things that you saw a lot. like in the microchip shortage. They'll strip out certain features like adjustable seats or high-end audio systems.

But more importantly, I think what you'll see, Brian, back in probably 20, 25 years ago, there was a palladium, which is a key input for catalytic converters, just skyrocketed. And what you saw the industry do is innovate around this so that they can reduce the amount of palladium. And I think you're going to seeing the same thing right now going on in the industry where they're going to look for ways to reduce these rare metal earths, which are metals, which are, you know, they're really important because they, you know, moderate the temperatures and allow these electric motors to function high speeds. We'll let it go like cobal. You know, it's just really good at what it does, but it comes from a really bad place. Mark Fields, former president, CEO, for great discussion,

Mark. Thank you. Thanks, Brian. That was interesting what he said about it being worse, even than what we saw during COVID. Stocks, skies are still higher on better than expected news. Jobs report. The S&P. is back above 6,000 for the first time since Feb. And even with yields higher, the 10-year back at 4.5% as you can see right there. We'll tell you more about what to do in these markets. And as we had to break, a check on a pair of recent debuts. Omane Health surging in its NASDAQ debut today, trading around $25 a share after pricing at 19.

And Circle, look at this one. Not only did it surge 160% yesterday, it's up another 38% today. Again, this IPO priced at $39 and is trading today at $115. We'll be right back. Welcome back, and we are seeing stocks tick higher after the stronger than expected employment report today. U.S. adding 139,000 jobs in May above the estimates and the unemployment rate, that was steady at around 4.2%. All numbers that the president called Great on Truth Social still said the Fed should cut by a point. Philly Fed Chair Patrick Harker also sees strength, but urged the Fed to be more patient.

Here's what he told us last hour. Look at the jobs numbers and you look at some of the other output numbers. It's solid. Now, there are risks there too to unemployment, but we're not seeing those show up, as you said, in the hard data. So for now, I am strongly of the belief we sit here, let some of this uncertainty resolve itself. How does our next guest feel?

He sees some underlying employment risks, flagging drops, and two lesser watch the numbers, the participation rate today, and the open jobs to population ratio. and says, if those are factored in, the unemployment rate would have actually climbed. Michael Gapen is chief U.S. economist at Morgan Stanley, and Phil Orlando is chief equity strategist at Federated Hermes. So, Michael, lay it out for us.

You still see an economy that's on the margin weakening? Yeah, I do think the jobs report today says the economy is cooling. I agree with the summary just brought forward that the economy's not rolling over and the bottom of the labor market isn't falling out. So I think today's number is consistent with cooling, but not rolling over. But as we noted, there are some softness underneath these headline numbers. The participation rate did tick lower. And I think you could argue that 95,000 downward revision to the prior two months,

it gives a hint of weakness. But again, these are the things we would expect in general if labor demand is softening and the hiring rate is slowing. So on that, a good report overall. for at least the near-term outlook for the economy. And I do agree that it means the Fed's likely to be patient and continue to evaluate how risks are building on both sides of its mandate.

Phil, if you'll sit tight for a second, I want to just talk about, we had on the screen there, Michael, 4.7%. You think that's what the unemployment rate would have been if the labor force hadn't shrank. Is it shrank or shrunk? And Deutsche had some interesting data the other day where they said, you know,

immigration has gone from huge numbers every month, people who are frankly coming into the workforce, it has screeched to a halt. What is the net impact all this is having on the economy and on inflation? Well, cyclically, it means certainly a slower growth economy, fewer consuming households. And I do think that there's an important factor that could explain some of the things we're seeing today. With immigration controls and stories about deportations, I do think you have to wonder about, is there a chilling effect in participation rates where some undocumented workers decide to step out of the workforce. If that's the case, that could help explain some of the participation rate decline.

And if that's true, it may be a more participation rate that's stable at lower levels. In other words, that 4.2 unemployment rate is not a false signal. It is a tight labor market. And you saw average hourly earnings rise 410. So maybe this is just month-to-month volatility. but a million more people than normal than last month anyway flowed from employment to out of the labor force. Normally, if this is a layoff story, you think they'd go from employed to unemployed, but no, there was a large flow out of employment into not in the workforce. And so, again, I do think immigration overall means the unemployment rate will stay low and the labor market will be tight, even as the economy cools.

That's why we don't have the Fed easing until 2026, because it'll see a lot more inflation first than it will see unemployment. Quick last one. I mean, as we get some of these really odd happenings, like the one you just mentioned, million people, just coming up, say they're no longer looking for work. I mean, do you trust the quality of the data here? Are you worried that there's any data collection issues as they narrow the CPI basket and things like that under some staffing problems? So far, no. I mean, I think the signal from the data is as good as it's been. But, you know, as you know, if we're worried, we just start taking two and three month averages, right?

So we need an accumulation of data to tell an accurate story. I do believe in the data that we're seeing. It can be volatile month to month, but I trust the signal. All right. So, Phil, take us home here. And it sounds like you actually kind of agree with Mike in the sense that this is economy that's not at risk of overheating. So you think the Fed should be cutting rates. Is that right?

Yeah, I agree with a lot of what Michael said. The jobs numbers, non-farm payroll number, is better and expected. But our number, for example, was only 77,000. So we were delighted to see the downward revision of 95,000 the two prior months. The household survey lost 700,000 jobs. The ISM numbers this week were both weaker than expected. So we see an economy that is slowing down. Now, when the Fed looks at, you know, it's dual mandate, the labor market, you know, a little soft.

what's going on with inflation. We've been monitoring, you know, the CPI and the PCE data for the last five or six months. That seems to be trending down. They're sitting here at four-year lows at the moment. So when the FOMC meets, you know, on the 18th, and this is an SEP meeting, they're going to be adjusting their summary of economic projections, how are they going to reflect, you know, those sets of data, you know, slowing economy, inflation that seems to be, you know, sort of grinding lower. In our view, when we put all that together, we think the Fed could cut twice at the back part of the year, maybe September, maybe December based upon, you know, how the data plays

out between now and that. And their own beige book is pretty downbeat. So just based on that alone, there seems to be talking about slowing econ. You're still looking for higher stock prices, though. And I said earlier that stocks were up because good news is good news. But after hearing you guys break down the employment report, I'm thinking maybe it wasn't that great news. although the bond but by the yields are higher so maybe it was i don't know but you either way see the

s&p going to 6500 this year and continuing its climb from here on out well in part is because we do expect that the fed is going to finally bite the bullet and realize that rates need to start coming down look with the upper band of the funds rated four and a half percent and cpia inflation nominal at 2.3 percent you can drive a truck through that gap kelly and the fed's got plenty of room to take the funds rate down to three percent let's say over the next you know 18 to 20 24 months. Directionally, if that's right, price earnings ratios ought to expand. We think the economy's not going in a recession. That suggests stock prices ought to work higher. All right. So there you have. I mean, not a terrible outcome, all things considered, but we'll see

if the Fed does respond in that way. Gentlemen, thanks. Phil Orlando, Michael Gapen. Thank you. Really appreciate it. All right, on deck here on Power Lunch, Tesla stock. It is bouncing back a bit. It's up 5% from yesterday's big selloff. So what do you do with the stock now? We'll hit that next. Welcome back, stocks edging higher this afternoon as we've got some more breaking news out of the White House. Amen, hello again. What's happening? Kelly, the next meeting between the United States and China is going to be on Monday, June 9th in London. That according to a social media post from President Trump, just a couple of moments ago.

In the social media post, the president says, I am pleased to announce that Secretary of the Treasury, Scott Besson, Secretary of Commerce, Howard Lutnik, and the United States Trade Representative Ambassador Jameson Greer will be meeting in London on Monday, June, 9th with representatives of China in reference to the trade deal. The president says the meeting should go very well. Thank you for your attention to this matter, as he often signs off this kind of tweet. Look, the president laying out here that his top trade team is going to meet with China's top trade team. That was one of the outcomes of the call between President Trump and President Xi earlier this

week was an agreement to an additional meeting. Now we know when that's going to take place and that it's coming up rather quickly. The other big outcome from that call was the idea that both. leaders had invited each other to each other's capitals for a face-to-face meeting. The dates of that exchange, or the first one of those exchanges anyway, we don't have yet, but the state planning and everything that takes place for those kinds of visits is enormous. The Treasury Secretary can much more easily hop on a plane to London as apparently he's going to do over the weekend for that Monday meeting.

And now I think a lot of market folks are going to be focused on whether or not there's a deal that can be reached between the U.S. and China. of the president suggested in the Oval Office earlier this week that they had agreed to some things on that call, but the details of those things needed to be ironed out, and that's what this meeting in London apparently is going to be. No details on what those things are, potential agreements, or where things are going to land on Monday. We're showing aiming in the markets, the S&P not really moving on it, but I will note that we are at the highs of the day, although we're not seeing a move on these headlines. They just broke, but this would appear to be a positive development. It's better than them saying, well, no meetings.

Yeah, I mean, you know, the old saying in diplomacy is talking is better than shooting, and I think in this case it's talking is better than tariffs. And I think that's right. I mean, if you are a fan of getting these tariffs removed, as a lot of market participants are, what you want is a deal, and in order to get a deal, you've got to talk. So the Geneva meeting ended up with a big positive for the market. This London meeting may end up the same way. But I think, you know, market's going to look for specifics.

You know, if they come out of London and don't have a big positive. anything concrete to announce, you know, that could be a signal for a market fade as well. Some breaking news there. The next meeting on trade will be on Monday, this Monday, in London, Damon Javers. Thank you very much. Right now, let's get to Pip Stevens with a CNBC news update. Hey, Brian, the Trump administration okayed the expansion of a Montana coal mine as part of the president's drive to reignite the coal industry. The Interior Department says the move will extend the life of the Bull Mountains coal mine outside of Billings by nine years and will allow for the mining of nearly 60 million tons of coal, mostly for export to Asia.

Deforestation in Brazil's Amazon Forest in May surged 92% when compared to the same month last year, according to official monitoring data released today. The figures showed a loss of 371 square miles of forest, the size slightly larger than New York City. Officials say losses from last year's drought-driven forest fires appeared in the data which contributed to the alarming increase. And Tom Cruise is now a Guinness World record holder for the most burning parachute jumps by an individual for his stunt work in Mission Impossible, the final reckoning. Cruise trained for weeks before jumping from a helicopter 16 times with a flaming parachute before deploying a backup and safely landing on the ground. Wow, Kelly, back to you. He's amazing.

It's been said a million times. Should be said a million more. Pippet. Would you disagree? No. I mean, listen, Thomas Mappithor from Glen Ridge, New Jersey. Jersey. Is that his name? Yeah, that's where he's, that's where he went to high schools, Glenridge, New Jersey. So anytime a New Jersey kid does well, he's from Kentucky, but he moved to New York. Okay. So you're no more, now you're a stalker. No, I have a friend that went to school of them. Because I'm old, but I will not jump out of a helicopter, not a burning helicopter, Pippa, but a just a regular. A regular. You and me both, Brian. Let's not do it. All right, we got to move on. All right, it's time now for today's three stock lunch. Indeed. Let's get the trades on three big

tech names joining us as new construct CEO David Traynor. David, of course, we got to start with Tesla. What do you do here after the big down day yesterday and amid the Musk Trump fight? I think it's time to bail. I mean, look, the market share stats for Tesla are disaster. Margins are disaster. If they lose EV credits, free cash flow is going to be a disaster. And look, the valuation still remains sort of hard to understand. I mean, at the current price, it implies that the company is going to have something like 40% market share of the entire electric vehicle market in 2035. So the risk reward here just doesn't make sense. If you're a momentum person and you want to just keep playing the speculative game, go for it.

But I think if you care about fundamentals, you want to be safe. It's a bad stock down. All right. So fundamentals and safe brings us to Apple, worldwide developers conference Monday. Expectations are kind of low, frankly. Do you pick up the stock here? We wouldn't. You know, it's not as dangerous. is Tesla. And look, Apple's one of the greatest companies of all time. I mean, the profit margins, the returns on capital, phenomenal. The best of all time, I think, in the history of the world for a company of its size. But the valuation's pretty steep. We think all the good news is priced in. We think they're running a little bit behind on AI. I think the tariff issues on the

margin present more risk than reward. And so we're not here saying you should head for the exits on Apple, but we wouldn't be adding to the position. Oh, okay. That's interesting. So what about Broadcom, had a monster comeback. The shares are down today. I mean, they did beat on the top and bottom lines. Free cash flow, maybe a bit of a disappointment. But again, record highs earlier this week, big turnaround this year, one of the biggest market cap companies in the world. Do you like it? I do not. This is one that we think has gotten ahead of itself. I think we saw with, you know, even though they beat on the earnings, stock still goes down. That's a definition of price for beyond perfection. When you run the numbers and do the work that we like to do, which is to understand the

cash flows required to justify the price, not the earnings, right? Because the three or four years of earnings mean nothing to the bigger picture of cash flows. Bracom's got to grow profits at 15% compounded annually for 25 years to justify the current price. That would put them at around 490 billion, which is four times where Apple is. So we think the stock is, to put it mildly, too expensive. All right. We need you and Stephanie Link to debate this one next time, I think. David, thanks very much. Appreciate it. David Traynor. All right, coming up, author and filmmaker, Justine Bateman, will join us live on saving Hollywood, or if Hollywood even needs to be saved. CryptoWatch is sponsored by Crypto.com.

Crypto.com is America's premier crypto platform. Welcome back. AI tax incentives, wildfires in California, making for some strange bedfellows. With Politico reporting, California governor Gavin Newsom met with actor, Trump emissary John Voight about exactly how to revive Hollywood. And we'll discuss that with author and filmmaker Justine Bateman next. Welcome back. We are two days away from Curtin Up at Broadway's biggest night of the year, the Tony Awards. And this year's ceremony comes as the Broadway box office is closing out its most profitable year ever. Quite a contrast with what's been going on in the theater world,

movie theaters, that is. CNBC's Brandon Goleman joins us. Brendan, what's going on here? How are they doing so much better than the movie industry. Yeah, hey, Kelly, look, your tourists spending on those experiences. The 2024-2020 season saw Broadway gross a record-breaking $1.89 billion, $14.6 million tickets sold. That surpasses its previous record of $1.82 billion that was set pre-COVID in the 2018-2019 season. The secret this year, one word, Hollywood. You have theaters go-goers shelling out big to be within arm's reach of some of Hollywood's biggest actors. George Clooney making his debut in Good Night and Good Luck. Denzel Washington and Jake Gyllenhaal and O'Hall and O'Helso, Kieran Culkin, Bill Burr, and Bob Odenkirk and Glenn Garry, Glenn

Ross. And those were the top three grossing shows for the season, pulling in a combined $10 million last week alone with ticket averages ranging between $2 and $400. Now, that's well above the norm with the average ticket price for the season coming in around $129. That's up from $124 back when the prior record was set in 2019. Tickets, though, remain below their highs. Look, A ticket now, accounting for inflation, should cost around $155. But beyond the big bucks, Broadway theater goers operated at over 91% capacity this season, the highest occupancy rate in recent years. Producers, of course, having to balance revenue goals in audience rebuilding by holding prices

relatively steady, offering discounted tickets for people like me who try to see everything. And, of course, those premium seats for some of the blockbuster runs that we just talked through, Kelly. One more stat for you. I'm curious if you can guess which. show made history this year, becoming the first Broadway show to gross over $5 million in a single week. I'm not much of a Broadway person, so the only thing that comes to mind is it like Hamilton? So it's a good guess. I will say, so pink, green, Wicked. Wicked was the show that did it. And I think

possibly a box office boost to your point. Yeah, exactly. Got it. Got it. Well, and there's the new strategy. You got to, you need Broadway and the box office and maybe a theme park too. Brendan. No crossover. Thank you very much. Appreciate it. Broadway is real life, real people on stage. Yeah, right in front of you. But for TV's commercials and movies, it's different. The industry is now able to use fake people that look very, very real. I mean, take a look at this. There's no sound on it, but video starts with a sentence. Okay, well, there's supposed to be people there. Anyway, this is all created, there we go. It was all created with AI. Now that obviously is because

cats don't go in space. But here's the reality. If AI takes over Hollywood, actors will likely not get paid, not one cent. And if humans go away, won't Hollywood just go away as well. New York Magazine's Vulture wrote about it and this week's Hollywood issue. And filmmaker and author Justine Bainman tweeted that out and she's been all over this topic for years and has been on with us to the past to talk about this hot button issue and joins us again now. Justine, thanks for joining us. What is the future of Hollywood and human beings with AI right here, right now? Well, two things go. going on. We have the more practical matters of kind of the dissolving of Los Angeles and

Southern California and everything that supports the business here, real estate values, tourism, everything. I mean, it's just going to be quite an economic disaster considering how much in Southern California is in and around the business. The second thing is, as far as AI and film, I think we're going to see streamers using the years and years of viewing history that they have on you and create customized pieces for you. They won't bother to copyright those because it'll be like Kleenex. And then for an upcharge, they can face replace you on films that they can license for this purpose from studios and other places that have. libraries. You could say, put my face on Luke Skywalker's body today. So we can, gosh, we've talked about it a little bit on my previous show, but it's kind of crazy

to think about it. So theoretically then, does, does time matter? Could Steve McQueen effectively make, and I'm using air quotes, make a new movie today? Yes, of course. If his estate licensed his image, sure. So, New, there's so much to say about this, but just you can imagine if you're a new actor, you're competing not, it used to be you compete against in auditions, those who were your age, your look, and available during the time that the film's going to shoot. But now you're going to compete against every actor that's ever lived. And I assume that Steve McQueen's estate could, and I'm not picking. I love Steve McQueen, by the way. they could license that out for a ridiculously small amount of money.

They wouldn't, but they could. And therefore, some human actor who's alive and trying to pay the rent and put food on the table is not going to get paid because the estate of Steve McQueen, which is already very wealthy, I'm sure, will get paid. This seems seismic for the industry. Yeah. I mean, the industry that we had for 100 years is done. I mean, what we have now is sort of a conveyor belt of content. And then this, you know, foray into basically the replacement of human labor with the AI elements.

But there is a new film business that's emerging that me and others are part of. Like we have the CRETO 23 Film Festival that we did this last March that was fantastic and we'll do it again, where no AI is allowed and all the proceeds go to the filmmakers. And, you know, filmmaking as an art will go forward. I think there's going to have to be new ways to distribute and stuff. And I don't know what those answers are yet as far as, like, financially, how does that, how does that remain healthy? But, yeah, what the business, what is passing as the business right now is not what we used to have at all.

And it was interesting to see that piece that you had on the theater. I think, you know, live performances or a mix of live with filmed, you know, could be something, obviously, that people are interested in. I love how all of the, kind of the internet is eating itself and everyone's going back to live. That's a very fun theme coming out of this. Justine, it's Kelly here. By the way, it's great to chat with you. So the music industry is similarly trying to figure this out right now. The Universal Warner and Sony are all trying to figure out.

How do they do digital fingerprints or something for the artist? Would you be okay if we all started to remix Justine Bateman? create AI products based on you, but you got comments. I mean, that sounds to me like a pretty good revenue stream. I could make, you know, I could be out there, make a cool movie or whatever and get, you know, royalties for the rest of my life as people just remix things. Would that be of interest to you, or do you think it's very important that you're only involved in original productions? It would never be of interest to me. I mean, I think it's quite soul-sucking to do that sort of thing. I know a number of people have and will, but, I mean, I'm not an actor anymore, but, but,

But I would imagine for a working actor or for someone who loves acting or, you know, feels called to it, all you have is your voice and your appearance and the way your body moves. And so if you are licensing that out, I don't know, you've just given away your entire purpose. It's, you know. I saw you tweet out. We showed the Tom Cruise parachute on fire thing. That was real. I mean, Tom Cruise is risking his life to make a movie. And you tweeted out that you blank.

The word you choose is a very impassioned word. We'll just say that. You got Brad Pitt in his F-1 movies. He's 61. He looks like he's 40 years old. Are they the end? I mean, look at the commitment. Will there be more stars like them or is this it?

I think Tom Cruise, his commitment to filmmaking and really, truly, putting his life on the line. almost every film of the last few years. It's tremendous and really just his passion for, for, it's, you know, there's a love exchange that happens. When you see a piece of art that somebody, a painting, that somebody, you can tell, put so much effort into it, they're giving you, the, the viewer, the recipient gets this love from it.

Yeah. And people go and see, you know, and even Tom Cruise's, you know, got, this video just before the film that thanks people for coming to the theater and thank you on behalf of everybody that put so much effort into this. You know, there's a love exchange that happens. And that doesn't occur at all with, uh, he's made with AI. You just didn't. You're saying you didn't care. When Buster Keaton makes a new movie, then let us know. Justine Bateman, great discussion. Keep it gone. But we're up against what we call a hard break in this industry. Justine, thank you. Thank you very much. Take a short break right back.

She's real. I'm real. I wouldn't mind royalties, though, if they want to use my likeness. In years, you know, past. Nobody wants my likeness, but I do want to say thank you for watching Power Lunch. Yeah, Justine Bateman was great. Have a great weekend, everybody, and closing bell starts right now.